In a step change from the days of Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest) in which the Court of Appeal rejected the notion of a general doctrine of good faith, many construction contracts now include an express requirement to act in “good faith”.
This trend is not confined to long term PPP agreements and alliancing arrangements. It is also seen in standard form contracts, such as the “mutual trust and co-operation” wording found in the NEC ECC contracts and (where selected) the supplemental collaborative wording found in the JCT:
“…the parties shall work with each other and with other project team members in a collaborative and co-operative manner, in good faith and in a spirit of trust and respect…”.
Commercial practitioners will also be aware of the recent judicial focus on relational contracts, into which contracts a duty of good faith may be implied. Last year the Court of Appeal noted that a PFI contract may be classified as a relational contract in Amey Birmingham Highways Ltd v Birmingham City Council. Continue reading